The public finances suffered yet another lurch into the red last month amid warnings of a record deficit this year that would force the next government to raise taxes or cut spending - or possibly both.

The overall shortfall between tax revenues and spending was £10.2bn in August - the worst figure for that month since such records began in 1993. Economists said the deficit could reach £70bn this financial year, double the 2007/08 figure and way above the £43bn estimate the chancellor, Alistair Darling, made in the budget in March.

A deficit of £70bn would easily exceed the previous record of £51bn set by the Conservative government of Sir John Major in 1993. For the April to August period, the deficit was running £12bn higher than in the same period last year - at £28bn.

The national debt figures lurched higher as the government's nationalisation of Northern Rock's £87bn debt came onto the books for the first time, pushing debt up to 43.3% of national income, well above the government's self-imposed 40% ceiling.

Excluding Northern Rock, the benchmark stood at 38.3%. The Treasury is reviewing its two main fiscal rules - the second being that tax should cover current spending over an economic cycle. Both are likely to be broken even if the impact of Northern Rock is removed.

The government's problem will be exacerbated by the downturn in the economy. Figures out on Wednesday showed the biggest rise in unemployment for 16 years in August, which will push down income tax receipts and increase benefit payments, pushing the deficit out still further.

The £2.7bn cost of unwinding the 10p tax debacle, the postponement of fuel duty rises and the temporary scrapping of the starting rate of stamp duty for house purchases will all push up the deficit, as will the housing market collapse.

This week's 4,500 job losses at Lehman Brothers, added to other City job losses, are particularly bad news for the public finances because bankers pay a lot of income tax, analysts pointed out.

Jonathan Loynes of Capital Economics said: "The state of the public finances continues to go from dreadful to even worse. If this rate of increase is sustained, borrowing will hit £70bn this year."

The figures show the government is struggling to control spending growth at a time when tax revenues are weakening.

Andrew Goodwin, an economist at the Ernst & Young Item Club, said: "If recent trends are sustained, borrowing would reach £64bn for the year as a whole. And with the economic outlook likely to worsen over the coming months there is a good chance that the out-turn could be even worse."

Howard Archer, the chief UK and European economist at Global Insight, said the chancellor's predictions had been "well and truly blown out of the water".

The shadow chief secretary to the Treasury, Philip Hammond, said: "Gordon Brown has built our economy on a mountain of public and private debt, leaving Britain poorly prepared in the face of the current economic crisis. His fiscal rules are now totally discredited.

"This is yet more evidence of why we need a new fiscal framework to bring the public finances back under control - and a new government to implement it."

Yvette Cooper, chief secretary to the Treasury, said: "Faced with unprecedented world shocks, it is right that we increase borrowing this year to help support the economy.

"We are cutting taxes by over £4bn for low and middle income families, and maintaining public sector investment to help families and the economy through these tougher times."